Antoine Cahuzac said, "We will have hundreds of millions of dollars that will be invested in this country from EDF over the next years."Kaavya Chandrasekaran&Himangshu Watts | ET Bureau | September 20, 2016, 12:50 IST

French state-run power major EDF Group is bullish on India’s renewableenergy sector and has plans to set up 2,000 megawatts of projects at a cost of $2 billion as it sees huge potential in the country. EDF EnergiesNouvelles, sees India at the core of its strategy to significantly expand its global renewable energy portfolio, Chief ExecutiveAntoine Cahuzac, said. In an interview with ET’s Kaavya Chandrasekaran and Himangshu Watts, Cahuzac said his company was not aiming to make unviable bids to quickly expand. He wants to government to ensure that companies that make unreasonable bids and are unable to build the project, should be made to feel the pain. Edited excerpts:

What prospects do you see in India for renewable energy?EDF is keen to double its renewable asset base over the next 15 years. We are present in more than 20 countries but we have zeroed in on a limited number in which we want to build a strong asset base. What are the prerequisites for us when we look for countries in the second category? First, we look for growth in electricity demand. India satisfies this requirement. Second, we consider whether there is already overcapacity. There is no such overcapacity in India. Third, compared to thermal, wind and solar energy’s contribution to the energy basket is not much in India, which means there is room for growth. Fourth, there are parts of this country which have fantastic wind quality and fantastic solar radiation. The quality of wind in states like Tamil Nadu and Gujarat is really very good. And last but not least, we look at the regulatory environment.

How much have you invested in India so far and how much will you do so in the future?We are aiming 2 GW in the joint venture, $1billion per GW, so that is $2 billion. We will have hundreds of millions of dollars that will be invested in this country from EDF over the next years.

Indian tariffs, especially in solar, have fallen dramatically. Some say solar developers bid too aggressively and many projects may not be completed. What is your view?We will see in the future. In the photo voltaic solar segment, technology is improving very quickly. Some developers have been bidding anticipating the progress technology will make. When I make a bid, I know I have to build the plant in the next 13 to 18 months. Today, if efficiency of modules is 18-19%, in 18 months it could improve to 21%. I might make my bid assuming 21% efficiency. You can assess the price of solar modules but as for efficiency… honestly it is a bit of a bet which I am not always ready to make. When these bets go wrong, projects get into problems. Sometimes projects are delayed because people wait, hoping for the technology to improve and help them. What we are seeing in every country and what we are telling every government is that you should make such rules while floating tenders that developers are forced to build. If they don’t, they should have to feel the pain. If it is not painful at all not to build, why should I take a big risk?

What is the scope of prices going down further in terms of equipment and efficiency?Let’s talk about wind. I think generally speaking the sector makes the assessment that in the next three to five years, difficult to make prediction beyond this, there will still be 20-30% decrease in price. It will come ... from result in any order, better organisation directing the tower, you will have some concrete tower, efficiency in the way to build towers; it will come mainly from the size of the turbine. If you look at all the world turbines that are in operation, the average must be close to 1.3-1.4 MW. Five years ago it was less than 1 MW. Now no one is considering turbines less than 2MW. So capacity of the turbine is increasing and therefore you have economy of scale. Instead of having five turbines of 1MW, which is five towers and cost money, you will have one 5MW tower. Even if the turbine represents roughly 70% of the investment cost of wind farms, you make a lot of economy of scale … In solar energy, prices can fall 5% every year with better efficiency and lower costs.

In which countries are you planning to invest most? Is there a ranking?I can tell you some of the countries which are clearly vital for us. North America is a key area. Turkey would be another one; India and China as well, South Africa and Brazil.

The EDF Group signed an MoU with Nuclear Power Corporation of India to build six nuclear reactors with a total capacity of 10,000 MW in Jaitapur. EDF had submitted a fresh techno-commercial proposal in July.What is its current status?There are discussions still going on to make sure the regulatory environment for nuclear energy in India is satisfactory for all. We were talking to the French ambassador and he told us there were some meetings recently. A nuclear plant is something that takes a lot of time, but it is part of the ambition of EDF in India – nuclear on one hand, renewable energy on the other. Work has not yet started because we must first set the framework in which we are going to work.

France gets the bulk of its energy needs from nuclear power. Would you advise India to go the same way?When one is trying to lower the level of CO2 emitted, a mix of nuclear and renewable is required. The base load should be taken care of by nuclear energy. Renewable energy comes from natural resources and can also be deployed in many different places very quickly. I do feel that a mix of nuclear and renewable, including hydro, is desirable, because we all know that wind or solar energy is variable in nature. There are intermittencies we need to deal with. Using hydro and nuclear is the way to deal with the intermittency. France has a much lower rate of Co2 emission than most other countries in Europe. I think we are 10 times below the European average due to our energy mix. And India's hydro energy potential is huge, wind potential is huge, solar potential is huge so you have all you need to go the same way.

Why did you choose Sitac to collaborate with instead of going it alone?India has 29 states, with many states having different governments, so collaborating with a local partner makes things simpler for us.

“To save the environment and to fight climate change, my government has planned a major campaign. By 2022, we want to generate 175 GW of renewable energy. In the last three years, we have already achieved 60 GW or around one-third of this target,” he said.